How We Invest
Our Investment style
Millinium is what is known in investment terms as an "absolute manager". This means we aim to produce a positive return regardless of the directions of financial markets.
Our investment philosophy is slanted towards conservative views of asset classes in order to generate consistent performance, rather than large profits one year and large losses the next.
At Millinium we believe it is essential to have a clear investment philosophy and carefully apply it, so that you know exactly how we are investing your money.
Millinium constructs its investment portfolios with what is termed as high conviction. This means we focus on a small number of investments which we have researched extensively.
We also try to keep turnover as low as possible, rather than spending too much of our investors’ money on brokerage. We can minimize trading because of our high-conviction approach – we don’t change our minds a lot.
Millinium will not own an investment simply because it is in an index. Millinium’s investment approach looks at the quality of the underlying assets, e.g. sustainable cash flow, balance sheet strength, and management ability.
Inherent in Millinium’s strategy is the confidence and patience to trust its investment decision making process through periods of “market noise” and short-term volatility; and, indeed, to continue looking for the sort of mis-pricing opportunities which such periods create.
Millinium chose to be an absolute return manager because managing to a benchmark can produce very disappointing results for investors. For example, if the benchmark index falls by 25% in one year, but the fund manager’s return is only negative 20%, the fund manager can collect a performance fee even though the investors have lost money.
By contrast, Millinium sets out to produce positive returns in all market conditions. From time to time, if we think that a particular asset class – e.g. Australian shares – is definitely overvalued, we would sell out of Australian shares and take a defensive position of 100% cash until the overvaluation goes away.